Invest in a multi family in NJ or out of state?

[Lorena Oliveira]

Hi all!

I am currently looking to start investing in real estate. The question is: where? I live in NJ, and wanted to invest here since rents are so high, however so are taxes, and house prices. A few people told me to invest here because rents are high, and vacancy is low. 

Other people told me to invest in other markets such as Memphis, Tennessee and hire a management company. I get scared with buying out of state because I won't be able to be seeing the property often... etc. Besides even though the houses in these markets are lower, so is the rent.

My husband works in construction, so buying a house here has the pro that a lot of the renovations he can do himself.

Also, we are supposed to have a recession within the next 12 months. Is buying a house now a good idea? NJ or TN?

Please advise!!

[Mike Bonadies]

Hi @Lorena Oliveira! Welcome to the world of REI and your path to becoming a landlord. I am a fellow landlord & property manager in NJ, specifically South Jersey. NJ is a perfectly viable place to find a multi-family to buy and hold. This is especially true in South Jersey where rents are NJ levels but lower taxes than in North Jersey and purchase prices rival the Midwest. The trade off is tenant demographics (you have to be okay with B- to C- areas) and local laws. NJ has some strange Landlord-Tenant laws (like not being able to end a lease even if the lease date has come to a close). Look in counties like:

Cumberland
Salem
Gloucester
Camden
Atlantic
Cape May

All have multi-families that can drive cashflow. 

Feel free to reach out if you ever have questions regarding the area.